The scale of bad loans held by banks in the European Union is "a major concern" and more than double the level in the United States, despite an improvement in recent years, the EU's banking regulator said on Tuesday.
Non-performing loans (NPL) across Europe's major banks averaged 5.6 per cent at the end of June, down from 6.1 per cent at the start of the year. But that compares with an average of less than 3 per cent in the United States and even lower in Asia, according to the European Banking Authority (EBA).
The total of NPLs across Europe is about 1 trillion euros ($US1.1 trillion), equivalent to the size of Spain's annual gross domestic product (GDP) and 7.3 per cent of the EU's GDP.
Tuesday's figures were the first time detailed data on NPLs, defined as a loan that is more than 90 days overdue or where problems are spotted earlier, have been released in Europe. The EBA data covered 105 banks, spanning 20 EU countries and Norway.
Some 16.7 per cent of loans at banks in Italy were designated as NPLs, equivalent to 17.1 per cent of the country's GDP. Spain's banks had an average NPL ratio of 7.1 per cent, or 15.8 per cent of its GDP.
Banks in Cyprus fared even worse, with half of their loans classified as bad, followed by Slovenia (28.4 per cent), Ireland (21.5 per cent) and Hungary (18.9 per cent).
"Although gradually improving, quality of assets remains a major concern in the EU and an impediment to new lending and banks' profitability, particularly in countries already under economic stress," the EBA said.
Banks in Sweden had the lowest level of NPLs at an average of 1.1 per cent, followed by Norway (1.4 per cent), Finland (1.7 per cent), Britain (2.9 per cent), the Netherlands (2.9 per cent) and Germany (3.4 per cent).
More News thefinancialexpress-bd
0 comments:
Post a Comment